Revenue model development within the video game industry

Abstract: Video games have substantially grown in both sales figures and mainstream popularity in contemporary culture. Through adoption of online purchasing and digital distribution methods, video games are no longer a niche hobby, but a global storytelling medium and industry. With growing audiences, however, video game studios face increasing challenges in relation to monetizing their video game titles. The purpose of this thesis is to explore how the adoption of online purchasing has changed the way video game studios develop revenue models for their titles. The problem area this study aims to contribute to reflects the limited and relatively fragmented academic knowledge on the process of revenue model development. To fulfill this purpose, this paper offers a theoretic framework that depicts revenue model development being influenced by three factors: "Player motivations and Types", "Developer considerations and practices" and "Online purchasing". Apart from the theoretic framework, the study applies a triangulation approach, which builds on cross-referencing empiric data collected from both industry experts, video game consumers and existing theories as described in the literature review. The findings of the study indicate the three main influencing forces are: consumer motivational factors, purchase intention modifying factors and developer adaptations in reaction to these behavioral patterns.